Posts tagged Sheldon Richman

Here is Senator Charles Schumer (D-NY) — who informs us that in conflicts between Wall Street and Main Street, he sides with Main Street and always has — expounding on the governing party’s new notion of transparency in hyperregulatory bailout capitalism:

We are working on major financial reform…. You’re gonna find a different system of regulation. The real problem—and this is government’s fault …—when the financial world changed, the system of regulation didn’t…. That will change. There will be a strong, quiet, hopefully more unified federal regulator…. And he’s gonna be tough–or she. But they’re gonna be quiet. So like when Bear Stearns began to run into trouble, they’re gonna call the heads of Bear Stearns in and say, All right fellas, you’re getting rid of those two hedge funds; you’re gonna raise more capital—even if means you have lower profitability. We’re not gonna tell anyone you’re doing this, but you do it or we’re gonna take sanctions against you. … You don’t need a lot of voices, yelling, because that just weakens the institution. You need a tough, strong regulator, unified—no holes in the system— … who … sees the problem ahead of time, so they have complete transparency, they know exactly what’s going on … and they come in and say straighten up even if your … profitability is lower and your stock has to go down.

Normally, in politics, transparency is used to refer to norms and processes that allow ordinary people to find out what government or other large institutions are doing with their money or how those institutions are making the decisions that affect their lives. For Charles Schumer, transparency in government regulatory agencies apparently means that government regulators will have complete access to information about everybody else’s business — and will call in the heads of large financial institutions to a secret meeting, behind closed doors, where they will make secret decisions, behind closed doors, which they will force on institutions whose decisions affect millions of people, which will be forced to comply with special requirements and subsidized with special government deals, which both the government and those institutions will deliberately conceal from the public, with the explicit purpose of preserving the economic status quo, and frustrating any effort by ordinary folks to find out what the hell the government is doing on their dime and supposedly in their names. Under Schumerian transparency, government regulators will know everything about what’s going on, and they will conspire with big bankers to make sure that you know nothing.

For Schumer, transparency is a one-way mirror — like the kind you see on TV cop shows. Guess which side the prisoner is on.

Libertarians who believe in non-consequentialist natural rights — that is, in the view that people have certain rights, as free individuals, which everyone is bound to respect regardless of the economic consequences of respecting them, and which they have for reasons that have nothing conceptually to do with economic consequences — still often invest a lot of energy in making a case that freed markets would produce better economic outcomes than markets distorted by government or by other forms of institutionalized coercion. Why is that? After all, if we believe that the right reason to be a libertarian is that other people are not your property (or some other suitable moralism), and not because of the good results that liberty might tend to produce, why spend time talking about those good results, or about the bad results that come from government coercion? If it convinces anybody to become a libertarian, won’t we be convincing them with the wrong reasons? When natural lawyers argue that freed markets produce good results, are they engaging in a form of bad-faith propaganda?

While I agree with everything you say at the abstract level, Mario, if we want to understand why our ideas are so readily dismissed as ideological by the likes of Obama and the intellectual world generally, we have to look beyond the myopic problem-by-problem approach that’s endemic to social democracy (based on the underlying notion that the economy and society are legible enough to reveal clear diagnoses of social problems). We have to look at the specific ideology that they have in mind–which, in Obama’s case, clearly is libertarianism. Some folks, he says again and again, think any government intervention is wrong in principle–and he does not mean the slippery-slope principle. He means the coercion is evil principle (or rather the coercion is evil/taxation is theft principle). . . . This kind of thinking about free-market ideas is commonplace in the intellectual mainstream, and it is not unjustified. The great scholar of ideology, Philip E. Converse (The Nature of Belief Systems in Mass Publics), pointed out that ideologies are packages of beliefs that are usually connected to each other only by pseudo-logic. Libertarians have discredited their good (Austrian) ideas for nearly 50 years by packaging them together with non-consequentialist arguments about natural rights, the virtue of selfishness, the equation of liberty with private property, and so on that make the Austrian empirical-theoretical part of the package eminently dismissable.

Then tell me, Sheldon, why bother with all the economic arguments made in The Freeman about why government intervention tends to have counterproductive effects? Is that just propaganda to get people to believe in the predetermined moral principle?

Here’s Sheldon:

I reject the consequentialist-nonconsequentialist dichotomy (Rand, for example, doesn’t fit neatly into one camp or the other, though I am no Randian). I will simply take the easy way out here and say your question strikes me as simply ridiculous. Why wouldn’t I want people to understand the damage government does to innocent people? Someone who believes in moral philosophy (at least as I and many other conceive it) is not foreclosed from noticing consequences. Quite the contrary.

Friedman, in reply:

Calling something simply ridiculous is not an argument. Nor is it an answer to my question.

Is free-market economics, or is it not, merely propaganda, however truthful, that you publish in order to get people to support free markets for the wrong reasons–given that it seems that you think that the right reasons lie not in the poverty that capitalism alleviates, etc., but in the nature of man qua man,natural rights to private property, or the intrisic value of freedum-cum-private property?

Sheldon, again:

I didn’t try to answer the question because it answers itself. Your question is based on a premise I reject (see above), but I can say that free-market economics informs people of facts they might appreciate knowing. I don’t know why the word propaganda would occur to you. Unless you take the approach I suggest above (the reintegration of consequentialiam and nonconsequentialism), I don’t know how you can tell a good consequence from bad.

Friedman then accused Sheldon of being disingenuous. (He also, both here and above, wrongly supposes that Sheldon is arguing in favor of capitalism. Actually, Sheldon argued in favor of free markets, which is not necessarily the same thing.) Anyway:

Sheldon, that is disingenuous. The Freeman does not publish articles about nutritional, home repair, automotive-purchase, or an infinite number of other types of facts [people] might appreciate knowing. The only facts about which it informs people are the bad consequences of government and the good consequences of the market.

Nothing wrong with that–but it counts as propaganda if you don’t think that its good consequences don’t provide the real argument for capitalism (which is, you seem to think, inherently good because it embodies freedom, regardless of its consequences), nor that its bad consequences provide the best argument against government (which is, you seem to think, inherently bad because it depends on coercion).

So as I originally said, libertarianism is an ideology that packages together superficially related topics: moral reasoning about the nature of man, coercion, freedom + economic reasoning about the sources of, and barriers to, material prosperity. (NATURALLY someone who has bought into this package will reject the consequentialist/deontological dichotomy! After all, that dichotomy threatens the coherence of the ideological package.)

A young Obama encountering this pseudo-logical libertarian confection will logically conclude that it is an unreasonable ideology. And so young Obama’s own unexamined ideology goes unchallenged, because he dismisses the good elements (Austrian economics) along with the bad (libertarian philosophy) as part of a big incoherent stew. And when he becomes president, he has a nice whipping boy–the dogmatic, unreasonable free-marketeer–as his opponent, an opponent thoughtlessly provided to him by US.

The first problem with all of this is that Jeffrey Friedman seems to have concluded, without giving much reason for why he concluded this, that the primary purpose of The Freeman is to convince people of the truth of libertarian political philosophy. That is a claim which is in need of some defense — actually, I would not find it surprising at all if the crew at The Freeman, the flagship publication of the Foundation for Economic Education, is actually mainly concerned, in that publication at least, to educate people about economics (freed-market economics in particular), not to convince them of the truth of libertarian political or moral principles. Of course, Friedman might then throw out another accusation of disingenuousness, and ask Well, why educate people about freed-market economics, if not to convince them of libertarianism? Well, I don’t know; why educate people about nutrition, home-repair, or buying an automobile? There are lots of things you might learn which have some bearing on libertarianism but which are not learned primarily as a means to convincing people of libertarianism.

Of course, the outcome of the education will probably not be irrelevant to libertarianism, in this case. Presumably becoming convinced of the economic importance of freed markets will make people more likely to support freed markets, and thus more likely to become libertarians. But if so, does it necessarily mean that their reasons for becoming libertarians are consequentialist reasons — and thus, for those of us who believe in natural rights, the wrong reasons, or at least reasons that fall short of the best ones? Only if you confuse the occasion of forming a judgment with the evidence that warrants the judgment; and therein lies the deeper problem with Friedman’s position. Friedman repeatedly asserts, without any particular argument beyond the polemical term pseudo-logic, that ideas about the econmic consequences of government coercion and ideas about the immorality of government coercion, cannot be related to one another in any meaningful way — unless one accepts the consequentialist view that the moral judgments conceptually depend on the economic results. But in fact there’s a much richer set of possible relationships between these two topics than Friedman seems to imagine. The connection is not just so much confectioner’s sugar; there are in fact at least three major reasons that might lead a non-consequentialist say something about the bad consequences of an act that they consider wrong in itself.

Reasons of urgency. Some evils things are evil in themselves; others are neutral or even in themselves, but evil in light of their consequences; and some are both evil in themselves and also produce evil consequences. As an example of the first kind of evil, you might consider laws that force a church to limit the size of big-ass crosses, on its own private property, to not more than 25 feet. I think this is a classic example of chickenshit petty tyranny; but I doubt it has much in the way of dire economic consequences. Other government zoning laws, on the other hand, do have some serious economic consequences — for example, laws that effectively forbid working-class people from living in certain neighborhoods by forbidding multiple unrelated people from living in a single house, or laws which force small businesses to take on huge additional fixed costs for storefront space because they are forbidden from operating outside of their homes. These have profound and destructive economic consequences (in fact, I’d argue that they have much more profound consequences than many conventionally pro-capitalist libertarians seem to realize). Both kinds of zoning laws are wrong, dead wrong, on natural-rights grounds — both are tyrannical invasions of the individual liberty to make any peaceful use you like of your own land. But if one is deciding which one to focus limited time and resources on changing, it’s not disingenuous or covertly consequentialist to think that the latter kind of law is more egregious, and a more urgent object of critique, than the former, in part because of the fact that the consequences are worse. Non-consequentialist libertarians hold that individual rights provide side-constraints on political action, not that they determine absolutely every detail about strategy or priorities in deciding which violations of those side-constraints we should focus on resisting.

Reasons of consequence thickness. If an evil is the sort of evil which is not only evil in itself, but also produces evil consequences, then libertarians are entitled (for reasons of consequence thickness) to complain, not only about the intrinsic evil but also about the destructive consequences that follow from it — even if the destructiveness is in some sense external to the coercion that causes it. Even if consequences are not what make something bad, they may make it worse than other things which are similar in everything except for their consequences, and if someone already has some independent reasons for considering an intervention bad, there’s nothing particularly propagandistic about also taking some time to mention to her the factors that make it even worse.

Dialectical reasons. But suppose that your reader is not a libertarian yet, not even partially; suppose she does not yet have any particular reasons for considering an intervention bad, other than the destructive consequences that you’ve just mentioned. Actually, I think this describes very few readers, even non-libertarian readers; most people already recognize, to some extent, that it’s good for people to have control over their own lives and that it’s wrong to coerce peaceful people. The issue is that they make exceptions to that principle in the case of certain arbitrary claims of political authority; or that they try to rationalize coercion by saying that some kind of collectivity makes it not really coercive — didn’t we agree to that tax increase?, etc. And the best way to undermine those exceptions or those rationalizations may not have anything in particular to do with pointing to some theory about economic consequences. But supposing that our reader just yet sign on for individual liberty on the particular topic under discussion; what then?

Well, as I said before, some evils are both evil in themselves and also conducive to evil consequences. Among those are some evils that produce evil consequences because they themselves are evil. Here’s an example: getting beaten or tortured over and over again can lead to long-term consequences like depression or debilitating flashbacks. The beatings and the torture aren’t evil because of the long-term effects — they’d be evil anyway, even if the victim had no memory of them at all — but rather the long-term effects for the victim are what they are, in part, because of the wrongness of what’s been done to her. (Of course those memories stir up fear and agony; what happened to her was profoundly wrong.)

If you are trying to convince someone of the evil of something that falls into this last category — where an evil produces evil consequences because it is evil in itself — it may be an important part of the dialectic for your interlocutor to come to understand how the consequences are evil, in order to understand how the root cause is evil in itself. Not because the evil of the root cause logically depends on the evil of the consequences (as in consequentialist argument), and also not because your interlocutor is being mislead to believe that it does (as in Friedman’s imagined propaganda). Rather, it’s because, once you understand that the consequence is evil, grasping the explanation for the destructiveness of the results may have something to do with grasping the evil of the root cause.

Why is it that the survivor of abuse feels helpless and afraid sometimes, even in a situation with no obvious immediate threat? Well, it has something to do with the fact that she was abused for so long, and specifically to do with the fact that she’s reacting to the awfulness of how she was treated at the time. (If the way she had been treated weren’t so awful, she wouldn’t react the way that she does.) Now, why is it that statist intervention has such bad economic consequences? Well, the economic consequences have something to do with basic facts about the kind of creatures that people are, and the kind of treatment that statist interventions necessarily entail — the fact that we are rational and creative beings operating with limited resources and with imperfect knowledge, and the fact that statist coercion violently overrides the creative consensual solutions that people adopt in order to make an honest living. The independent wrongness of trampling all over peaceful people’s considered judgments and their individual liberty to dispose as they see fit of their own person the fruits of their own labor has something to do with fully understanding why the trampling so often results in ignorant, irrational, impoverishing, or stultifying distortions to our daily lives. Seeing the evil of the interventions — the wrongness of shoving around or cannibalizing one group of people for the benefit of another — is part and parcel of fully understanding why it produces the bad economic results that it produces (and also of seeing why it is that the results that it produces, whatever those may be, ought to be counted as the bad sort of results).

It’s important to emphasize here the difference between dialectic and propaganda (in Friedman’s sense). Friedman seems to be using the word propaganda to describe a conclusion-driven approach, in which the idea is to get your reader to the conclusion you want by whatever means, even if the argument that leads them to accept that conclusion is (what you’d consider to be) a bad argument. But the idea of this sort of dialectical approach is not that. It will seem like that only if you’ve confused dialectical starting-points which lead to a recognition of first principles, for points of evidence which logically justify those principles. The idea, then, would be to introduce the reader to the consequences partly for the sake of pure economic understanding; and partly also because the reader may, on considering not only the consequences but the explanation of those consequences, be led to understand something else beyond the badness of the consequences, because that something else provides the best explanation for what the economic argument has convinced her of.

Of course, none of this is to say that beginning from freed-market economics, and proceeding through this sort of dialectical process, is the only way, or even the best way, for a convinced natural lawyer to try to advance her ideas about the evils of coercion. Sometimes it is a good way, and sometimes it’s not; in point of fact I think there are many cases in which a simple moral appeal is more likely to make the case to your audience than trying to pull out some graph paper to do some fancy economic kung-fu. (This often goes unrecognized, in intellectual circles, because intellectuals have something of a professional interest in underestimating the importance of simple, non-technical arguments; and because people who would like to consider themselves engagé have often been suckered, by the preferences of a handful of people in the media, government, and academe, into believing that the kind of people who are more likely to be convinced by technical economic arguments than by fire-eating moral arguments are the only kind of people who exist, or at least the only kind of people worth trying to convince of your political views.) But while direct moral arguments may sometimes be preferable, for natural lawyers, to dialectical engagements that begin with arguments about consequences, it doesn’t follow that the latter must be carried on in bad faith. Taking an indirect path to the topic of the natural law is not the same thing as leaving out the topic of the natural law; and leading people down an argumentative path is not necessarily a matter of misleading them about where it’s going.

The latest issue of The Freeman (January/February 2009) — is now available online at their new and glossy revamped website. I mention this partly for its own sake, but partly also because, one of the things that you will find in that new issue, at the new website, is this:

Individualists get a bad rap in politics these days. That should come as no surprise; politics these days is dominated by electoral politics, and electoral politics is an essentially anti-individualistic enterprise. With free markets and other forms of voluntary association, people who can’t agree on what’s worthwhile can go their own ways. But the point of government elections is to give people in the political majority a means for forcing through their favorite laws, projects, and rulers over the objections of people in the political minority, and making everybody obey those laws, fund or participate in those projects, and acknowledge those rulers.

Still, even if it is unrealistic to expect individualism to get much respect from people who are deeply invested in electoral politics, it’s not too much to ask them not to try to score political points by totally distorting our position. In any case, if they do, it’s worth taking the time to set things straight.

For example, consider The Social Animal by neoconservative New York Times columnist David Brooks (September 12). He begins by quoting Barry Goldwater’s argument (from The Conscience of a Conservative) that Every man for his individual good and for the good of his society, is responsible for his own development. The choices that govern his life are choices that he must make; they cannot be made by any other human being… . Conservatism’s first concern will always be: Are we maximizing freedom?

Brooks says that Goldwater’s ideas seem to come from a vision of human life based on solitary, rugged individuals—the stout pioneer crossing the West, the risk-taking entrepreneur with a vision, the stalwart hero fighting the collectivist foe. Brooks protests that a tide of research in the human and social sciences has demonstrated that Goldwater’s old-fashioned individualist notions aren’t supported by the latest empirical evidence because, Brooks tells us, human beings are social creatures by nature, closely intertwined with each other in the fabric of a shared social life.

. . .

Maybe Brooks is right that Goldwater’s legacy is holding Republicans back politically. Individualistic ideas can be a tough sell, particularly since the obsessive focus on electoral politics as a panacea for every social ill ensures that genuinely individualistic ideas are almost never presented in the media or discussed in public forums. But whether he’s right or wrong about the best way for Republicans to fully modernize, I don’t care much about the Republican Party or its political prospects, or about Barry Goldwater’s reputation. I do care about the prospects for individualism and truly freed markets. And Brooks’s case against them commits a series of serious and misleading errors….

The title of this post, for what it’s worth, was the original title of the column, and will make some more sense once you’ve read the article (the current title is based on the fact that it appeared in the regular It Just Ain’t So! department).

As always, I’d like to thank Sheldon Richman for the (very flattering) invitation, and for his very helpful editorial work. I’m especially happy to get the chance to put a distinctly Tuckerite understanding of individualism, complete with a cheer for wildcat unionism, and a reference to William Gillis’s freed markets, into an official publication of the Foundation for Economic Education.

It’s Sunday again; that means it’s time for Shameless Self-Promotion. This Sunday, unlike most, I’ll be leading off, because here’s what I received in the mail a few days ago:

Libertarianism Through Thick and Thin

by Charles Johnson

To what extent should libertarians concern themselves with social commitments, practices,
projects, or movements that seek social outcomes beyond, or other than, the standard libertarian commitment to expanding the scope of freedom from government coercion?

Clearly, a consistent and principled libertarian cannot support efforts or beliefs that are
contrary to libertarian principles—such as efforts to engineer social outcomes by
means of government intervention. But if coercive laws have been taken off the table, then
what should libertarians say about other religious, philosophical, social, or cultural
commitments that pursue their ends through noncoercive means, such as targeted moral
agitation, mass education, artistic or literary propaganda, charity, mutual aid, public praise,
ridicule, social ostracism, targeted boycotts, social investing, slowdowns and strikes in a
particular shop, general strikes, or other forms of solidarity and coordinated action? Which
social movements should they oppose,which should they support, and toward which should
they counsel indifference? And how do we tell the difference?

In other words, should libertarianism be seen as a thin commitment, which can be
happily joined to absolutely any set of values and projects, so long as it is peaceful,
or is it better to treat it as one strand among others in a thick bundle of intertwined
social commitments? Such disputes are often intimately connected with other disputes
concerning the specifics of libertarian rights theory or class analysis and the mechanisms of
social power. To grasp what’s at stake, it will be necessary to make the question more
precise and to tease out the distinctions among some of the different possible relationships
between libertarianism and thicker bundles of social, cultural, religious, or
philosophical commitments, which might recommend integrating the two on some level or
another.

One note about the article: it had to be shortened substantially both for reasons of space and considerations of the likely audience. I’ve talked with Sheldon, and I’ll be posting the longer version of the essay here at Rad Geek People’s Daily in a couple of weeks. In the meantime, I would like to thank Sheldon Richman, for his encouragement, patience, and invaluable editing prowess; as well as Laura Breitenbeck and Roderick Long, for inspiration, discussion, and past collaboration, without which this article simply would not exist.

So, that’s me; what about you? What did you all write about this week? Leave a link and a short description for your post in the comments.

I’ll be posting about my talk at the LP meeting soon, I promise, but I just blew an afternoon on painting a fence (in order to appease our complex’s property manager). I hear that this is the sort of thing that’s supposed to make men feel a sense of vigor and pride and accomplishment. But mostly it just made me want to take a hot bath and zone out with the TV until tomorrow.

Fortunately, other people do the thinking so I don’t have to. In particular, here’s a shout-out and congratulations to Kevin Carson (and thanks also to the indefatigable Sheldon Richman) for another fine article in The Freeman, on Hierarchy or the Market:

F. A. Hayek, in The Use of Knowledge in Society, used distributed, or
idiosyncratic, knowledge—the unique situational knowledge possessed by each individual—as an
argument against state central planning.

Milton Friedman’s dictum about other people’s money is well known. People are more careful
and efficient in spending their own than other people’s money, and likewise in spending money on
themselves more so than in spending money on other people.

A third insight is that people act most efficiently when they completely internalize the positive and
negative results of their actions.

The corporate hierarchy violates all of these principles in a manner quite similar to the bureaucracy
of a socialist state. Those at the top make decisions concerning a production process about which
they likely know as little as did, say, the chief of an old Soviet industrial ministry.

The employees of a corporation, from the CEO down to the worker on the shop floor, are spending
other people’s money, or using other people’s resources, for other people. Its managers, as Adam
Smith observed 200 years ago, are managers rather of other people’s money than of their
own.

By its nature, the corporation substitutes administrative incentives for what Oliver Williamson called
the high powered incentives of the market: effort and productivity are separated from
reward.

. . . The state’s entry barriers, like licensing and capitalization requirements for banks, reduce
competition in the supply of credit and drive up its price; enforcement of artificial titles to vacant
and unimproved land has a similar effect. As a result, labor’s independent access to capital is
limited; workers must sell their labor in a buyer’s market; and workers tend to compete for jobs
rather than jobs for workers.

State subsidies to economic centralization and capital accumulation also artificially increase the
capital-intensiveness of production and thereby the capitalization of the dominant firm. The effect
of such entry barriers is to reduce the number of employers competing for labor, while increasing the
difficulty for small property owners to pool their capital and create competing enterprise.

The cumulative legacy of these past acts of state-assisted robbery, and ongoing state-enforced
unequal exchange, determines the basic structural foundations of the present-day economy. These
include enormous concentrations of wealth in a few hands, the absentee ownership of capital by
large-scale investors, and a hired labor force with no property in the means of production it works.

Necessarily, therefore, the absentee owners must resort to the expedients of hierarchy and top-down authority to elicit effort from a workforce with no rational interest in maximizing its own productivity.

. . .

The problem is not hierarchy in itself, but government policies that make it artificially prevalent. No doubt some large-scale production would exist in a free market, and likewise some wage employment and absentee ownership. But in a free market the predominant scale of production would likely be far smaller, and self-employment and cooperative ownership more widespread, than at present. Entrepreneurial profit would replace permanent rents from artificial property and other forms of privilege. Had the industrial revolution taken place in a genuine free market rather than a society characterized by state-backed robbery and privilege, our economy today would probably be far closer to the vision of Lewis Mumford than that of Joseph Schumpeter and Alfred Chandler.

Coalitions of the Willing

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